10-Q 1 j9897001e10vq.txt PITTSBURGH FINANCIAL CORP. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ____________ Commission File Number 0-27522 PITTSBURGH FINANCIAL CORP. -------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 25-1772349 ------------------------------- ---------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification Number) 1001 Village Run Road Wexford, Pennsylvania 15090 --------------------------------------- ---------- (Address of principal executive office) (Zip Code) (724) 933-4509 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark whether the Registrant is an accelerated filer (as defined by Rule 12b-2 of the Act). Yes No X --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of February 14, 2003, there were issued and outstanding 1,416,881 shares of the Registrant's Common Stock, par value $.01 per share. PITTSBURGH FINANCIAL CORP. TABLE OF CONTENTS

2 PART I - ITEM 1 FINANCIAL STATEMENTS PITTSBURGH FINANCIAL CORP. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

See accompanying notes to unaudited consolidated financial statements. 3 PITTSBURGH FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME

See accompanying notes to unaudited consolidated financial statements. 4 PITTSBURGH FINANCIAL CORP. CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED DECEMBER 31, 2002 (UNAUDITED)

See accompanying notes to unaudited consolidated financial statements. 5 PITTSBURGH FINANCIAL CORP CONSOLIDATED STATEMENT OF CASH FLOWS

See accompanying notes to unaudited consolidated financial statements. 6 PITTSBURGH FINANCIAL CORP. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Basis of Presentation The accompanying unaudited interim consolidated financial statements of Pittsburgh Financial Corp. (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Pittsburgh Savings Bank (d/b/a BankPittsburgh) (the "Bank") and Pittsburgh Home Capital Trust I. Pinnacle Settlement Group, LLC is a majority owned subsidiary of the Company. FraMal Holdings Corporation is a wholly owned subsidiary of the Bank. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three months ended December 31, 2002 are not necessarily indicative of the results to be expected for the year ending September 30, 2003. The unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements and notes thereto for the year ended September 30, 2002. Note 2 - Business The Company is a unitary bank holding company headquartered near Pittsburgh, in Wexford, PA. The Bank, a wholly owned subsidiary of the Company, is a state chartered stock savings bank headquartered in Pittsburgh, Pennsylvania, which conducts business from seven offices in Allegheny and Butler counties. The Bank is primarily engaged in attracting retail deposits from the general public and using such deposits together with borrowings to originate loans. The Company's other wholly owned subsidiary, Pittsburgh Home Capital Trust I (the "Trust") is a Delaware business trust formed in December 1997 to issue $11.5 million of 8.56% Cumulative Trust Preferred Securities. These securities represent undivided beneficial interests in Pittsburgh Home Capital Trust I. The Trust purchased junior subordinated deferrable interest debentures which were issued by the Company. 7 The Company's majority owned subsidiary, Pinnacle Settlement Group, LLC ("PSG"), a Pennsylvania limited liability company, was formed in April 2002 for the purpose of engaging in the title insurance business, settlement and escrow business, and related or ancillary activities. The Company has an 80% equity interest and an 84% voting interest in PSG. An unrelated limited liability company and two individuals have the remaining minority interest. FraMal Holdings Corporation is a wholly owned subsidiary of the Bank, headquartered in Delaware. The Company and Bank are subject to the regulations of certain federal and state agencies and periodic examinations by certain regulatory authorities. All of the company's activities are community banking related. Note 3 - Earnings per share Earnings per share are based on the weighted average number of shares of common stock. Basic earnings per share is calculated by dividing income available to holders of common shares by the weighted average number of common shares outstanding during the period. Options, warrants, and other potentially diluted securities are excluded from the basic calculation, but are included in diluted earnings per share. The following table sets forth the computation of basic and diluted earnings per share:

8 The Company accounts for its Employee Stock Ownership Plan (ESOP) in accordance with SOP 93-6, "Employers Accounting for Employee Stock Ownership Plans,"; shares controlled by the ESOP are not considered in the weighted average shares outstanding until the shares are committed for allocation to an employee's individual account. In accordance with SOP 93-6, uncommitted shares held by the ESOP (86,088 and 106,376 shares at December 31, 2002 and 2001, respectively) are excluded from basic average shares outstanding. Note 4 - Recent Accounting and Regulatory Developments In June 2001, the Financial Accounting Standards Board (FASB) issued FAS No. 142, "Goodwill and Other Intangible Assets," effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests in accordance with the Statement. Other intangible assets will continue to be amortized over their useful lives. On October 1, 2002, the Company adopted FAS No. 147, "Acquisitions of Certain Financial Institutions." The Statement provides guidance on the accounting for acquisition of a financial institution which had previously been addressed in FAS No. 72, "Accounting for Certain Acquisitions of Banking or Thrift Institutions." FAS No. 147 states that the excess of the fair value of liabilities assumed over the fair value of the tangible and identifiable intangible assets acquired, if acquired in a business combination, represents goodwill that should be accounted for in accordance with FAS No. 142. As a result of new accounting pronouncements, the Company ceased amortization of goodwill in the quarter ended December 31, 2002. Application of these Statements reduced non-interest expense by $7,275 during the quarter ended December 31, 2002 and increased net income by $4,802. Had goodwill not been amortized in 2001, non-interest expense would have been reduced by $8,000 during the quarter ended December 31, 2001 and net income would have increased by $5,448. FAS No. 142, as part of its adoption provisions, requires a transitional impairment test to be applied to all goodwill and other indefinite-lived intangible assets within the first half of fiscal year 2003 and any resulting impairment loss be reported as a change in accounting principle. Management does not expect an impairment loss to be recorded in 2003 as a result of this test. 9 PART I - ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION At December 31, 2002, the Company's total assets amounted to $403.3 million compared to $413.7 million at September 30, 2002, a decrease of $10.4 million or 2.5%. Cash and interest-bearing deposits decreased $17.5 million or 73.5%, to $6.3 million at December 31, 2002, compared to $23.8 million at September 30, 2002. The Company's loans receivable, net of allowance, decreased $4.2 million, or 1.7%, to $236.6 million at December 31, 2002 compared to $240.8 million at September 30, 2002. The decrease is primarily attributable to the extraordinarily high level of repayments of residential 1-4 family mortgage loans that the Company has experienced. Investments and mortgage-backed securities increased $11.7 million, or 9.4%, from $124.2 million at September 30, 2002 to $135.9 million at December 31, 2002. The Company's investment in FHLB Stock increased $400,000 from $8.1 million at September 30, 2002 to $8.5 million at December 31, 2002. The increase in FHLB stock is primarily due to an increase of $1.2 million in FHLB advances which increased the amount of stock required to be purchased by the Bank. Bank owned life insurance totaled $6.4 million at December 31, 2002 compared to $6.3 million at September 30, 2002. Total liabilities decreased by $10.6 million or 2.7%, to $380.0 million at December 31, 2002 compared to $390.6 million at September 30, 2002. Deposits decreased by $11.9 million, or 6.1% to $184.3 million at December 31, 2002 compared to $196.2 million at September 30, 2002. During the quarter ended December 31, 2002, the Company sold its Bethel Park and Mt. Oliver offices and deposits in two separate transactions. Total deposits sold in these transactions were approximately $16.4 million. Excluding the sale of the two branch offices, retail deposits increased $5.5 million and wholesale certificates of deposit decreased $1.0 million. Borrowings increased $1.2 million or 0.7% to $183.1 million at December 31, 2002 compared to $181.9 million at September 30, 2002. Guaranteed preferred beneficial interest in subordinated debt decreased $1.3 million or 13.3% from $9.8 million at September 30, 2002 to $8.5 million at December 31, 2002 as the Company repurchased approximately $641,000 of the outstanding trust preferred securities at an average cost of $10.26 per share. Total stockholders' equity increased $300,000 or 1.3% to $23.3 million at December 31, 2002 compared to $23.0 million at September 30, 2002. 10 RESULTS OF OPERATIONS GENERAL. The Company reported net income for the quarter ended December 31, 2002 of $320,000 as compared to net income of $146,000 for the same quarter in 2001. The increase of $174,000 in net income for the three months ended December 31, 2002 compared to the three months ended December 31, 2001 was primarily the result of a $472,000 increase in noninterest income and a $90,000 decrease in provision for loan losses, which were partially offset by a $181,000 decrease in net interest income (due to a $1.09 million decrease in interest income, partially offset by a $913,000 decrease in interest expense), a $110,000 increase in noninterest expense and a $96,000 increase in income tax expense. Included in the $472,000 increase in noninterest income noted above is a pre-tax net gain of $454,000 on the sale of branch deposits and branch offices and a $51,000 pre-tax net loss on the early extinguishment of trust preferred debt. This compares to a pre-tax net gain on investment sales of $8,000 for the quarter ended December 31, 2001. Excluding the results of these items, net income for the quarter ended December 31, 2002 was $59,000 as compared to $140,000 for the same period in 2001, a decrease of $81,000 or 57.9%, primarily as a result of declines in net interest income. The Company's average interest rate spread decreased 4 basis points from 1.59% for the three months ended December 31, 2001 to 1.55% for the three months ended December 31, 2002. This decrease was primarily attributable to a decrease in the yield on the Company's earning assets of 80 basis points from 7.04% for the three months ended December 31, 2001 to 6.24% for the three months ended December 31, 2002 partially offset by a decrease in the Company's cost of funds of 76 basis points from 5.45% for the three months ended December 31, 2001 to 4.69% for the three months ended December 31, 2002. The Company's yield on earning assets was adversely impacted by the significant level of short term investments held by the Bank in anticipation of the sale of the two branch offices. As a result of the above, combined with a smaller earning asset base, the Company's net interest income decreased from $1.9 million for the three months ended December 31, 2001 to $1.7 million for the same quarter in 2002, a decrease of $181,000 or 9.5%. Noninterest income, excluding investment sales, the sale of branch deposits, branch offices, and the loss on early extinguishment of trust preferred debt, increased for the quarter by $78,000 or 17.7%. The increase was primarily due to an increase in income recognized from bank owned life insurance, and fees generated from the Company's majority owned loan settlement subsidiary formed during fiscal 2002. Noninterest expense increased $110,000 or 5.53% from the year ago quarter. The increase is primarily related to the aforementioned loan settlement subsidiary. Compensation and other benefits increased $94,000 or 10.1% from $927,000 for the quarter ended December 31, 2001 to $1.0 million for the quarter ended December 31, 2002, premises and occupancy costs increased $12,000 or 3.1% from $411,000 for the three months ended December 31, 2001 to $423,000 for the three months ended December 31, 2002, and marketing costs increased $27,000 or 31.8% from $86,000 for the quarter ended December 31, 2001 to $113,000 for the quarter ended December 31, 2002. The Company's data processing costs decreased $21,000 or 16.5% from $129,000 for the three months ended December 31, 2001 to $108,000 for the three months ended December 31, 2002. 11 The Company reported diluted earnings per share of $.24 for the quarter ended December 31, 2002, compared to $.10 for the quarter ended December 31, 2001. Excluding the impact of investment sales, sale of branch deposits and branch offices and the loss on early extinguishment of trust preferred debt, diluted earnings per share were $.04 for the quarter ended December 31, 2002. There was no impact from items on diluted earnings per share for the quarter ended December 31, 2001. INTEREST INCOME. Interest income decreased $1.09 million or 15.5% for the quarter ended December 31, 2002, compared to the same period in 2001. The average balance of loans receivable decreased by $43.6 million for the quarter ended December 31, 2002, and the related yield decreased .28% from 7.64% to 7.36% for the quarter when compared to the same period in 2001. The Company has continued to experience an extraordinarily high level of residential mortgage repayments as well as continued to diversify its loans receivable portfolio to more broad based, full service commercial lending. The Company's yield on earning assets was also adversely impacted by the significant level of short term investments held by the Bank in anticipation of the sale of the two branch offices during the quarter ended December 31, 2002. 12 Average Balances, Net Interest Income and Yields Earned and Rates Paid For the three months ended December 31,

13 The average balance of investment and mortgage-backed securities totaled $136.2 million with a weighted average yield of 4.69% for the three months ended December 31, 2002 compared to $114.0 million with a weighted average yield of 5.99% for the same period in 2001. Loans receivable, net at December 31, 2002 and September 30, 2002 are summarized below:

INTEREST EXPENSE. Interest expense decreased $913,000 or 17.7% for the three months ended December 31, 2002, compared to the same period in 2001. The average cost of funds for the three months ended December 31, 2002 decreased to 4.69% from 5.45% and the average balance of interest-bearing liabilities decreased $17.6 million when compared to the same period in 2001. The decrease in interest-bearing liabilities is primarily the result of the sale of the Company's Bethel Park and Mt. Oliver offices and deposits. Average deposits decreased $18.3 million or 1.35% for the three months ended December 31, 2002 when compared to the same period in 2001. Average borrowed funds increased $2.5 million for the three months ended December 31, 2002 when compared to the same period in 2001. Interest expense associated with the trust preferred securities of Pittsburgh Home Capital Trust I totaled $221,000 for the three months ended December 31, 2002 and $238,000 for the three months ended December 31, 2001. 14 PROVISION FOR LOAN LOSSES. It is management's policy to maintain an allowance for estimated losses based on the risk of loss in the loan portfolio. Management's periodic evaluation of the adequacy of the allowance is based on the Company's loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of the underlying collateral and current economic conditions. Management classifies all delinquent assets as Special Mention, Substandard, Doubtful or Loss. A reserve level is estimated by management for each category of classified loans, with an estimated percentage applied to the delinquent loan category balance. Activity for the period under analysis is also taken into account (charge offs, recoveries). While management has allocated the allowance to different loan categories, the allowance is general in nature and is available for the loan portfolio in its entirety. Activity in the allowance for loan losses is summarized as follows for the three months ended December 31, 2002 and 2001:

The Company designates all loans that are 90 or more days past due as non-performing. Generally, when loans are classified as non-performing, unpaid accrued interest is a reduction of interest income on loans receivable and is only recognized when cash payments are received. The Company's non-performing assets increased from $4.8 million at September 30, 2002 to $5.1 million at December 31, 2002. This $300,000 increase was primarily attributable to a $353,000 increase in non-accruing one-to-four family mortgage loans and a $264,000 increase in non-accruing commercial real estate loans, which were partially offset by a $100,000 decrease in non-accruing construction loans and a $253,000 decrease in real estate owned. Although non-performing assets increased in the one-to-four family and commercial real estate portfolios, most of these loans are secured by property located in the Company's market area. During the quarter ended December 31, 2002, four of the properties held in real estate owned were sold at their net realizable value. The allowance is increased by provisions for loan losses, which are charged against income. During the three months ended December 31, 2002 and 2001, the Company recorded a provision for losses on loans of $60,000 and $150,000, respectively. 15 NONINTEREST INCOME. Noninterest income increased by $472,000 or 104.8% for the three months ended December 31, 2002 compared to the same period in 2001. As noted above, the Company recognized a pre-tax net gain of $454,000 on the sale of branch deposits and branch offices and a $51,000 pre-tax net loss on the early extinguishment of trust preferred debt. This compares to a pre-tax net gain on investment sales of $8,000 for the quarter ended December 31, 2001. Excluding the aforementioned items, noninterest income increased $78,000 or 17.7%. Service charges and other fees increased $25,000 to $370,000 for the three months ended December 31, 2002, compared to $345,000 for the same period in 2001. Income from bank owned life insurance, which was purchased during the three months ended December 31, 2001, increased $89,000 to $93,000 for the three months ended December 31, 2002, compared to $4,000 for the same period in 2001. Other income decreased $37,000 to $56,000 for the three months ended December 31, 2002, compared to $93,000 for the same period in 2001. The increases in service charges and other fees are primarily the result of fees generated from the Company's majority owned loan settlement subsidiary formed during fiscal 2002 and, to a lesser extent, increases to the Company's fee structure to remain competitive in the marketplace. NONINTEREST EXPENSE. Noninterest expense increased by $110,000 or 5.53% for the three months ended December 31, 2002, compared to the same period in 2001. The increase is primarily attributable to the Company's majority owned loan settlement subsidiary. Compensation and other benefits increased $94,000 to $1.0 million for the three months ended December 31, 2002 compared to $927,000 for the three months ended December 31, 2001. Premises and occupancy costs increased $12,000 to $423,000 for the three months ended December 31, 2002 compared to $411,000 for the three months ended December 31, 2001. Marketing costs increased $27,000 to $113,000 for the three months ended December 31, 2002 from $86,000 for the three months ended December 31, 2001. The Company's data processing costs decreased $21,000 to $108,000 for the three months ended December 31, 2002 compared to $129,000 for the three months ended December 31, 2001. PROVISION FOR INCOME TAXES. The Bank recognized a provision for income taxes of $170,000 for the three months ended December 31, 2002, compared to $74,000 for the same period in 2001. The effective tax rates during the three months ended December 31, 2002 and 2001 were 34.7% and 33.6%, respectively. 16 LIQUIDITY AND CAPITAL RESOURCES The Company's primary sources of funds are deposits, FHLB borrowings, repayments, prepayments and maturities of outstanding loans, maturities of investment securities and other short-term investments, and funds provided from operations. While scheduled loan repayments and maturing investment securities and short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by the movement of interest rates in general, economic conditions and competition. The Company manages the pricing of its deposits to maintain a deposit balance deemed appropriate and desirable. In addition, the Company invests in short-term investment securities and interest-earning assets which provide liquidity to meet lending requirements. Although the Company's deposits have historically represented the majority of its total liabilities, the Company also utilizes other borrowing sources, primarily borrowings from the FHLB of Pittsburgh. At December 31, 2002, the Company had $163.1 million of outstanding borrowings from the FHLB of Pittsburgh. The maximum remaining borrowing capacity at December 31, 2002 was approximately $61.6 million. Liquidity management is both a daily and long-term function of business management. The Bank uses its sources of funds primarily to meet its ongoing commitments, to pay maturing savings certificates and savings withdrawals, to fund loan commitments and to maintain a portfolio of mortgage-backed and investment securities. At December 31, 2002, the total approved loan commitments outstanding amounted to $10.6 million including $4.2 million in loans in process, and unused lines of credit amounted to $15.3 million. Certificates of deposit scheduled to mature in one year or less at December 31, 2002, totaled $48.5 million. Management believes that a significant portion of maturing deposits will remain with the Bank. Under federal regulations, the Bank is required to maintain specific amounts of capital. The following table sets forth certain information concerning the Bank's regulatory capital.

17 "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 In addition to historical information, forward-looking statements are contained herein that are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause future results to vary from current expectations, include, but are not limited to, the impact of economic conditions (both generally and more specifically in the markets in which the Company operates), the impact of competition for the Company's customers from other providers of financial services, the impact of government legislation and regulation (which changes from time to time and over which the Company has no control), and other risks detailed in this Form 10-Q and in the Company's other Securities and Exchange Commission ("SEC") filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements, to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risk factors described in other documents the Company files from time to time with the SEC. PART I - ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Management presently monitors and evaluates the potential impact of interest rate changes upon the level of net interest income and the economic value of the Company's equity ("EVE") on a monthly basis. EVE is the difference between incoming and outgoing discounted cash flows from assets, liabilities, and off-balance sheet contracts. The Company focuses on the impact of a plus and minus 200 basis point immediate interest rate shock on its net interest income. The Company utilizes the Sendero system for its in-house modeling efforts and also works with an outside banking consultant in modeling its interest rate risk position. Quantitative and qualitative disclosures about market risk are presented in Item 7A of the Company's Annual Report on Form 10-K for the year ended September 30, 2002, filed with the SEC on December 23, 2002. Management believes there have been no material changes in the Company's market risk since September 30, 2002. 18 PART I - ITEM 4 CONTROLS AND PROCEDURES As of December 31, 2002, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Disclosure controls and procedures are the controls and other procedures of the Company that are designed to ensure that the information required to be disclosed by the Company in its reports filed or submitted under the Securities Exchange Act of 1934, as amended ("Exchange Act") is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in its reports filed under the Exchange Act is accumulated and communicated to the Company's management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. 19 PITTSBURGH FINANCIAL CORP. PART II Item 1. Legal Proceedings Neither the Company nor the Bank is involved in any pending legal proceedings other than non-material legal proceedings occurring in the ordinary course of business. Item 2. Changes in Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Security-Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 99.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). 99.2 Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350). (b) No Form 8-K reports were filed during the quarter. 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PITTSBURGH FINANCIAL CORP. Date: February 14, 2003 By: /s/ J.Ardie Dillen ------------------ J. Ardie Dillen Chairman, President and Chief Executive Officer Date: February 14, 2003 By: /s/ Michael J. Kirk -------------------- Michael J. Kirk Executive Vice President and Chief Financial Officer 21 CERTIFICATIONS I, J. Ardie Dillen, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Pittsburgh Financial Corp. (the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) Designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 14, 2003 /s/ J. Ardie Dillen ------------------------------------ J. Ardie Dillen President and Chief Executive Officer CERTIFICATIONS I, Michael J. Kirk, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Pittsburgh Financial Corp. (the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) Designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a) All significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 14, 2003 /s/ Michael J. Kirk ---------------------------------- Michael J. Kirk Executive Vice President and Chief Financial Officer

PITTSBURGH FINANCIAL CORP 10-Q